Can I Withdraw from KiwiSaver for Financial Hardship While Living in Australia?

Question from Luke, Can I Withdraw from KiwiSaver for Financial Hardship While Living in Australia?

Answer from AI:

When it comes to withdrawing funds from your KiwiSaver account due to financial hardship, understanding the eligibility criteria is crucial. The KiwiSaver Act 2006, which governs KiwiSaver schemes in New Zealand, outlines various conditions under which members can make withdrawals. However, the specifics of residency requirements, especially concerning members living in Australia, can be a bit complex.

KiwiSaver Financial Hardship Withdrawals

First, let’s clarify what the KiwiSaver Act 2006 says about financial hardship withdrawals. According to the Act, members can withdraw some or all of their KiwiSaver funds if they are experiencing significant financial hardship. This includes situations such as:

• Inability to meet minimum living expenses
• Inability to meet mortgage repayments on the primary family residence, leading to the mortgagee seeking to enforce the mortgage
• Modifying a home to meet the special needs of a dependent family member with a disability
• Paying for medical treatment for a member or a dependent family member
• Paying for funeral costs of a dependent family member
• Suffering from a serious illness

Residency Requirements

The KiwiSaver Act 2006 does not explicitly state that a member must be residing in New Zealand to qualify for a financial hardship withdrawal. However, the process and approval for such withdrawals are at the discretion of the individual KiwiSaver provider, who may have their own criteria and interpretations of the legislation.

Key Points to Consider

Provider’s Discretion: KiwiSaver providers have some discretion in determining whether a member’s circumstances meet the criteria for financial hardship. They may also have policies regarding the management of accounts for members who are overseas, including those residing in Australia.

Documentation and Evidence: Members applying for a financial hardship withdrawal must provide detailed evidence of their financial situation. This includes information on income, expenses, assets, and liabilities. Providers may have specific requirements for this documentation, especially for members living outside New Zealand.

Consultation: It’s advisable to consult directly with your KiwiSaver provider or seek legal advice to understand their specific requirements and the rationale behind their decision. Legal professionals can offer guidance on the interpretation of the KiwiSaver Act and how it applies to your situation.

Next Steps

If you believe that your circumstances qualify for a financial hardship withdrawal but are facing challenges due to residing in Australia, consider the following steps:

1. Review Your Provider’s Policy: Carefully review your KiwiSaver provider’s policy on financial hardship withdrawals, paying close attention to any residency requirements or conditions for overseas members.
2. Seek Clarification: Contact your KiwiSaver provider to seek clarification on their decision. Ask for detailed reasons if your application is denied and inquire about any appeal process.
3. Legal Advice: Consider consulting a legal professional who specializes in KiwiSaver or financial law. They can provide advice on your rights under the KiwiSaver Act and assist with any appeal or complaint process.
4. Complaints Process: If you’re unable to resolve the issue with your provider, you may consider filing a complaint with the Financial Services Complaints Ltd (FSCL) or another dispute resolution scheme your provider is a member of.

Remember, while the KiwiSaver Act 2006 provides a framework for withdrawals due to financial hardship, individual providers may have additional criteria or interpretations. It’s essential to communicate directly with your provider and seek professional advice if needed.

For more detailed information on the KiwiSaver Act 2006, you can visit the New Zealand Legislation website.